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She pointed out that the purpose of the meeting on April 16 was to engage in the proposed consultations under Article XXII of the General Agreement on Tariffs and Trade (GATT).
However, she said, it proved impossible to conduct the consultations on the agreed basis and in accordance with the World Trade Organisation (WTO) dispute settlement procedures (DSU).
Article XXII.1 of the GATT provides for bilateral consultations between the requesting and responding parties (i.e. Hong Kong and Turkey in this case), and Article 4.11 of the WTO DSU allows for other members joining the Article XXII.1 consultations if they are accepted by the responding party on grounds of their substantial trade interest.
"The consultations could not proceed because Turkey and the European Communities (EC) insisted at the outset of the meeting, contrary to Hong Kong's position, that the consultations could not be considered as being conducted bilaterally between Hong Kong and Turkey," Mrs Lai said.
"Instead, Turkey demanded that Hong Kong should hold consultations with both Turkey and the EC as a so-called 'joint exercise'. Turkey tried to argue that since the quantitative restrictions have been imposed arising from the formation of the EC/Turkey Customs Union, both Turkey and the EC should jointly participate at the consultations with Hong Kong."
Mrs Lai explained that while Hong Kong had no problem with the EC participating as an interested party under the proper WTO procedures, the Turkish position of a "joint exercise" with the EC was however a derogation from the framework previously agreed between Hong Kong and Turkey, and it also deviated from the multilateral rules, Hong Kong therefore insisted that the consultations be held in accordance with the agreed framework.
said.
"But Turkey did not agree. The consultations therefore did not take place," she
The Deputy Director-General of Trade elaborated that the situation was reported to the WTO Dispute Settlement Body at its meeting on April 17.